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Albertsons Terminates Acme Markets Labor Contract

Parent company says move was triggered by union demands

Albertsons LLC told labor union leaders of its Philadelphia-based Acme Markets division that it was unilaterally terminating its contract that expired in February 2012, effective April 30.

United Food and Commercial Workers Local 1776 has scheduled a 7 p.m. Monday meeting for its 2,700 Acme employee-members to discuss options, which include a strike, lockout or working without a contract.

"A work stoppage is always the last resort," Wendell Young IV, president of UFCW Local 1776, was quoted as saying in a story in The Philadelphia Inquirer.

"Acme is trying to avoid their responsibility [to pay into the workers' health fund] by terminating the contract," Young told the newspaper, adding that a 10 percent increase in payments to the employer-employee fund is due May 1.

Acme’s parent company, Albertsons LLC, which is owned by an investor group led by New York-based private equity firm, Cerberus, which acquired Albertsons in 2013, said union demands for increases was the cause for the contract termination.

Chris Wilcox, VP, communications & public affairs for Albertsons LLC, told Progressive Grocer: “Our labor contract with Local 1776 expired in February 2012 and we have been operating under an extension since that time. This past week we advised the union that we have cancelled the extension, but will continue to honor the terms and conditions, such as wage rates, scheduling rules and benefit contributions provided for under the expired contract, since its expiration date, and intend to continue to do so moving forward while we negotiate for a mutually agreeable new multi-year contract with Local 1776.

“After careful consideration, we provided Local 1776 with notice of the cancellation of the expired contract because of the risk under the contract of health care cost increases which we believe need to be negotiated as part of the collective bargaining process rather than unilaterally implemented on the parties. We provide and will continue to provide some of the best health care coverage in the nation to our associates, but need to work with the union to craft provisions that work in today’s health care environment.”

The company sent an update about the negotiations to Acme Markets’ Local 1776 members as follows:

Our labor contract with Local1776 expired in February 2012 and we have been operating under an extension since that time. This past week we advised the union that we have cancelled the extension, but will continue to honor the terms and conditions, such as wage rates, scheduling rules and benefit contributions provided for under the expired contract, since its expiration date, and intend continue to do so moving forward while we negotiate for a mutually agreeable new multi-year contract with Local1776. After careful consideration, we provided local1776 with notice of the cancellation of the expired contract because of the risk under the contract of health care cost increases which we believe need to be negotiated as part of the collective bargaining process rather than unilaterally implemented on the parties. We provide and will continue to provide some of the best health care coverage in the nation to our associates, but need to work with the union to craft provisions that work in today's health care environment.

Since the contract expiration date, we have and will continue to negotiate in good faith with Local1776 and are optimistic that we will arrive at a successful conclusion of these negotiations very soon as well.

What's the impact to the business? And to the associates?

- There is no impact. We will continue to honor the terms and conditions, such as wage rates, scheduling rules and benefit contributions provided for under the expired contract, since its expiration date, and intend [to] continue to do so moving forward while we negotiate for a mutually agreeable new multi-year contract with Local1776.

- We are committed to restoring Acme's proud heritage of excellence and these contracts will help us, as an Acme team, to do so.